The provision of a senior secured revolving loan of up to €10 million to Farm Enterprise "Organic Systems". The Loan will be used to finance the increased working capital needs of Agrofusion Group. This project was approved in the context of the Bank's response to the COVID-19 pandemic.
The operation will provide necessary liquidity to finance the current farming and processing campaign until November 2020 and beyond. Securing sufficient working capital financing will be crucial for Agrofusion Group to achieve sustainable production volume under COVID-19 environment. Therefore, it will help the Group to preserve its investments, which were part of the original project between the Bank and Agrofusion approved in 2017.
ETI score: 60
The project will help preserve Agrofusion's ability to meet the transition impact that is expected to be achieved as part of the original engagement with the company approved in 2017. The original transition impact objectives are as follows:
(i) Improving standards in terms of resource efficiency (Best Available Techniques compliance and water savings);
(ii) Demonstration of new replicable activities through the promotion of organic farming in Ukraine;
(iii) Skill transfer thanks to trainings offered to young people about modern farming techniques and technologies;
(iv) The recruitment for permanent jobs in rural areas.
The new engagement is associated with the PTI score of 60 of the original transaction.
ORGANIC SYSTEMS FE
Farm Enterprise "Organic Systems", incorporated in Ukraine, is one of the main operating companies of Agrofusion Group.
EBRD Finance Summary
Total Project Cost
The EBRD financing is provided in the extraordinary circumstances of the COVID-19 crisis that have impacted the economy and limited new lending opportunities in the markets. Local banks for instance are reducing their working capital limits for the existing clients. Specific triggers for the Enhanced Additionality Approach do not apply.
Environmental and Social Summary
Categorised B (2019 ESP). Financing of working capital for an agribusiness company is associated with site-specific E&S impacts that can be managed via implementation of a good environmental and social stewardship practices. The Borrower is an existing EBRD Client with a good track record on previous projects operating robust, certified, Environmental and Social Management Systems, and with the capacity to implement the Project in line with the PRs. E&S assessment for the current Project included review of current ESAP status, which demonstrated that the Company is compliant with national E&S regulatory requirements and has fully implemented all the required E&S mitigation measures under the ESAP. No new E&S issues arise from the new transaction and the Client will continue to maintain its Environmental and Social Management Systems and E&S compliance in line with the EBRD ESP. The Borrower has recently introduced a COVID-response plan aimed at minimization of financial, operational, health and safety and social risks. No redundancies or adverse changes in the working conditions due to COVID impacts are expected. The Bank will continue monitoring of E&S compliance through the review of annual environmental and social reports.
Technical Cooperation and Grant Financing
The Project will have a Technical Cooperation (TC) component provided by the Japan-EBRD Technical Cooperation Fund. The TC funds will partially cover the legal due diligence costs.
Company Contact Information
ORGANIC SYSTEMS FE
+38 0512 58 79 01
+38 0512 58 79 01
34 Prospect Myru, 54034, Mykolayiv, Ukraine
PSD last updated
14 Aug 2020
Further information regarding the EBRD’s approach to measuring transition impact is available here.
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